HealthEquity (HQY) 10-Q 9 Sep 20 2021 Q2 Quarterly report Financial data

Cover Page

Cover Page - shares	6 Months Ended
	Jul. 31, 2020	Sep. 01, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 31, 2020
Document Transition Report	false
Entity File Number	001-36568
Entity Registrant Name	HEALTHEQUITY, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-2383166
Entity Address, Address Line One	15 West Scenic Pointe Drive
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Draper,
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84020
City Area Code	801
Local Phone Number	727-1000
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	HQY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		76,863,514
Entity Central Index Key	0001428336
Current Fiscal Year End Date	--01-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed consolidated balance

Condensed consolidated balance sheets - USD ($) $ in Thousands	Jul. 31, 2020	Jan. 31, 2020
Current assets
Cash and cash equivalents	$ 268,910	$ 191,726
Accounts receivable, net of allowance for doubtful accounts of $1,954 and $1,216 as of July 31, 2020 and January 31, 2020, respectively	70,235	70,863
Other current assets	43,982	34,711
Total current assets	383,127	297,300
Property and equipment, net	34,528	33,486
Operating lease right-of-use assets	95,095	83,178
Intangible assets, net	783,106	783,279
Goodwill	1,333,808	1,332,631
Deferred tax asset	59	18
Other assets	34,658	35,089
Total assets	2,664,381	2,564,981
Current liabilities
Accounts payable	11,708	3,980
Accrued compensation	36,435	50,121
Accrued liabilities	37,424	46,372
Current portion of long-term debt	54,688	39,063
Operating lease liabilities	13,521	12,401
Total current liabilities	153,776	151,937
Long-term liabilities
Long-term debt, net of issuance costs	952,898	1,181,615
Operating lease liabilities, non-current	79,304	68,017
Other long-term liabilities	8,210	2,625
Deferred tax liability	129,857	130,492
Total long-term liabilities	1,170,269	1,382,749
Total liabilities	1,324,045	1,534,686
Commitments and contingencies (see Note 6)
Stockholders’ equity
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of July 31, 2020 and January 31, 2020, respectively	0	0
Common stock, $0.0001 par value, 900,000 shares authorized, 76,872 and 71,051 shares issued and outstanding as of July 31, 2020 and January 31, 2020, respectively	8	7
Additional paid-in capital	1,127,136	818,774
Accumulated earnings	213,192	211,514
Total stockholders’ equity	1,340,336	1,030,295
Total liabilities and stockholders’ equity	$ 2,664,381	$ 2,564,981

Condensed consolidated balanc_2

Condensed consolidated balance sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 31, 2020	Jan. 31, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 1,954	$ 1,216
Preferred stock, par value (usd per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized (in shares)	100,000,000	100,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	900,000,000	900,000,000
Common stock, issued (in shares)	76,872,000	71,051,000
Common stock, outstanding (in shares)	76,872,000	71,051,000

Condensed consolidated statemen

Condensed consolidated statements of operations and comprehensive income (loss) (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Revenues [Abstract]
Revenue	$ 176,039	$ 86,623	$ 366,050	$ 173,675
Cost of revenue
Cost of revenue	74,255	28,183	156,192	57,482
Gross profit	101,784	58,440	209,858	116,193
Operating Expenses [Abstract]
Sales and marketing	12,167	8,391	23,622	17,361
Technology and development	30,654	11,645	61,732	22,550
General and administrative	20,493	9,262	39,491	17,971
Amortization of acquired intangible assets	19,077	1,494	37,779	2,985
Merger integration	10,365	2,784	23,135	2,784
Total operating expenses	92,756	33,576	185,759	63,651
Income from operations	9,028	24,864	24,099	52,542
Other income (expense)
Interest expense	(8,895)	(67)	(21,158)	(130)
Other income (expense), net	(824)	(1,061)	(1,588)	22,602
Total other income (expense)	(9,719)	(1,128)	(22,746)	22,472
Income (loss) before income taxes	(691)	23,736	1,353	75,014
Income tax provision (benefit)	(543)	4,370	(325)	13,826
Net income (loss)	(148)	19,366	1,678	61,188
Comprehensive income (loss)	$ (148)	$ 19,366	$ 1,678	$ 61,188
Net income per share:
Basic (in usd per share)	$ 0	$ 0.30	$ 0.02	$ 0.97
Diluted (in usd per share)	$ 0	$ 0.30	$ 0.02	$ 0.94
Weighted-average number of shares used in computing net income per share:
Basic (in shares)	72,343	64,220	71,669	63,289
Diluted (in shares)	72,343	65,583	72,971	64,785
Service revenue
Revenues [Abstract]
Revenue	$ 103,805	$ 26,282	$ 215,076	$ 53,090
Cost of revenue
Cost of revenue	65,246	19,745	136,259	40,394
Custodial revenue
Revenues [Abstract]
Revenue	46,909	43,614	93,808	85,566
Cost of revenue
Cost of revenue	4,998	4,209	10,043	8,332
Interchange revenue
Revenues [Abstract]
Revenue	25,325	16,727	57,166	35,019
Cost of revenue
Cost of revenue	$ 4,011	$ 4,229	$ 9,890	$ 8,756

Condensed consolidated statem_2

Condensed consolidated statements of stockholders' equity (unaudited) - USD ($) $ in Thousands	Total	Common stock	Additional paid-in capital	Accumulated earnings
Beginning balance at Jan. 31, 2019	$ 477,079	$ 6	$ 305,223	$ 171,850
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock			6,651
Other issuance of common stock		1	458,494
Stock-based compensation			13,618
Net income (loss)	61,188			61,188
Ending balance at Jul. 31, 2019	1,017,031	7	783,986	233,038
Beginning balance at Apr. 30, 2019	529,299	6	315,621	213,672
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock			2,281
Other issuance of common stock		1	458,494
Stock-based compensation			7,590
Net income (loss)	19,366			19,366
Ending balance at Jul. 31, 2019	1,017,031	7	783,986	233,038
Beginning balance at Jan. 31, 2020	1,030,295	7	818,774	211,514
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock			2,751
Other issuance of common stock		1	286,777
Stock-based compensation			18,834
Net income (loss)	1,678			1,678
Ending balance at Jul. 31, 2020	1,340,336	8	1,127,136	213,192
Beginning balance at Apr. 30, 2020	1,040,650	7	827,303	213,340
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock			1,618
Other issuance of common stock		1	286,777
Stock-based compensation			11,438
Net income (loss)	(148)			(148)
Ending balance at Jul. 31, 2020	$ 1,340,336	$ 8	$ 1,127,136	$ 213,192

Condensed consolidated statem_3

Condensed consolidated statements of cash flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019
Cash flows from operating activities:
Net income	$ 1,678	$ 61,188
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	56,106	9,722
Stock-based compensation	18,834	13,618
Amortization of debt issuance costs	2,533	31
Gains on marketable equity securities	0	(27,285)
Other non-cash items	1,925	0
Deferred taxes	(568)	7,868
Changes in operating assets and liabilities:
Accounts receivable	(152)	(1,689)
Other assets	(3,187)	(4,962)
Operating lease right-of-use assets	5,563	1,286
Accounts payable	6,047	(1,083)
Accrued compensation	(13,854)	(5,926)
Accrued liabilities and other current liabilities	(6,017)	4,942
Operating lease liabilities, non-current	(5,723)	(1,210)
Other long-term liabilities	5,477	331
Net cash provided by operating activities	68,662	56,831
Cash flows from investing activities:
Purchases of property and equipment	(8,987)	(3,492)
Purchases of software and capitalized software development costs	(21,787)	(9,518)
Acquisition of intangible member assets	(24,922)	(1,736)
Purchases of marketable securities	0	(53,845)
Net cash used in investing activities	(55,696)	(68,591)
Cash flows from financing activities:
Proceeds from follow-on equity offering, net of payments for offering costs	287,318	458,881
Principal payments on long-term debt	(215,625)	0
Settlement of client-held funds obligation, net	(10,292)	0
Proceeds from exercise of common stock options	2,817	6,564
Net cash provided by financing activities	64,218	465,445
Increase in cash and cash equivalents	77,184	453,685
Beginning cash and cash equivalents	191,726	361,475
Ending cash and cash equivalents	268,910	815,160
Supplemental cash flow data:
Interest expense paid in cash	17,659	101
Income taxes paid in cash, net of refunds received	798	9,119
Supplemental disclosures of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable or accrued liabilities	1,104	3
Additions to goodwill due to measurement period adjustments	1,177	0
Exercise of common stock options receivable	66	87
Follow-on equity offering costs accrued during the period	540	386
Debt issuance costs accrued during the period	0	345
Computer software intangible asset
Supplemental disclosures of non-cash investing and financing activities:
Purchases of intangible assets	1,262	487
Acquired HSA portfolios
Supplemental disclosures of non-cash investing and financing activities:
Purchases of intangible assets	$ 58	$ 6,500

Summary of business and signifi

Summary of business and significant accounting policies	6 Months Ended
	Jul. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of business and significant accounting policies	Summary of business and significant accounting policies Business HealthEquity, Inc. ("HealthEquity" or the "Company") was incorporated in the state of Delaware on September 18, 2002. HealthEquity is a leader in administering health savings accounts (“HSAs”) and complementary consumer-directed benefits (“CDBs”), which empower consumers to access tax-advantaged healthcare savings while also providing corporate tax advantages for employers. Principles of consolidation The condensed consolidated financial statements include the accounts of HealthEquity and its direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of presentation The accompanying condensed consolidated financial statements as of July 31, 2020 and for the three and six months ended July 31, 2020 and 2019 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2020. The fiscal year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Follow-on equity offering In July 2020, the Company closed a follow-on public offering of 5,290,000 shares of common stock at a public offering price of $56.00 per share, less the underwriters' discount. The Company received net proceeds of approximately $286.8 million after deducting underwriting discounts and commissions of approximately $8.9 million and other offering expenses payable by the Company of approximately $0.6 million. The Company used $200.0 million of such proceeds to repay debt under its term loan facility. Significant accounting policies There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020. Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires financial assets measured at amortized cost be presented at the net amount expected to be collected. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the new standard as of February 1, 2020 using the modified retrospective transition method. The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends ASC 820, "Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted the new standard as of February 1, 2020. The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. The Company adopted the new standard as of February 1, 2020. The Company retrospectively adopted the provision related to the classification of taxes partially based on income, and prospectively adopted the provisions related to intraperiod tax allocation and interim recognition of enactment of tax laws. The adoption of this standard did not have a material effect on the Company’s current- or prior-period condensed consolidated financial statements.

Net income per share

Net income per share	6 Months Ended
	Jul. 31, 2020
Earnings Per Share [Abstract]
Net income per share	Net income per share The following table sets forth the computation of basic and diluted net income per share: Three months ended July 31, Six months ended July 31, (in thousands, except per share data) 2020 2019 2020 2019 Numerator (basic and diluted): Net income (loss) $ (148) $ 19,366 $ 1,678 $ 61,188 Denominator (basic): Weighted-average common shares outstanding 72,343 64,220 71,669 63,289 Denominator (diluted): Weighted-average common shares outstanding 72,343 64,220 71,669 63,289 Weighted-average dilutive effect of stock options and restricted stock units — 1,363 1,302 1,496 Diluted weighted-average common shares outstanding 72,343 65,583 72,971 64,785 Net income per share: Basic $ 0.00 $ 0.30 $ 0.02 $ 0.97 Diluted $ 0.00 $ 0.30 $ 0.02 $ 0.94 For the three months ended July 31, 2020 and 2019, approximately 2.1 million and 0.3 million shares, respectively, attributable to stock options and restricted stock units were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive. For the six months ended July 31, 2020 and 2019, approximately 0.6 million and 0.3 million shares, respectively, attributable to stock options and restricted stock units were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive.

Business combination

Business combination	6 Months Ended
	Jul. 31, 2020
Business Combinations [Abstract]
Business combination	Business combination Acquisition of WageWorks On August 30, 2019, the Company closed the acquisition (the "Acquisition") of WageWorks, Inc. ("WageWorks") for $51.35 per share in cash, or approximately $2.0 billion to WageWorks stockholders. The Company financed the transaction through a combination of $816.9 million cash on hand plus net borrowings of approximately $1.22 billion, after deducting lender fees of approximately $30.5 million, under a term loan facility. The Acquisition was accounted for under the acquisition method of accounting for business combinations. Consideration paid was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the Acquisition date. The initial allocation of the consideration paid was based on a preliminary valuation and is subject to potential adjustment during the measurement period (up to one year from the Acquisition date). Balances subject to adjustment primarily include the valuations of acquired assets (tangible and intangible) and liabilities assumed, as well as tax-related matters. The Company expects the allocation of the consideration transferred to be finalized within the measurement period. The following table summarizes the Company's current allocation of the consideration paid in the Acquisition: (in millions) Initial Allocation Adjustments Updated Allocation Cash and cash equivalents $ 406.8 $ (14.5) $ 392.3 Other current assets 56.5 1.0 57.5 Property, plant, and equipment 26.6 — 26.6 Operating lease right-of-use assets 42.5 — 42.5 Intangible assets 715.3 — 715.3 Goodwill 1,330.5 (1.3) 1,329.2 Other assets 5.9 — 5.9 Client-held funds obligation (237.5) 17.1 (220.4) Other current liabilities (69.1) (3.4) (72.5) Other long-term liabilities (26.7) — (26.7) Deferred tax liability (128.7) 1.1 (127.6) Total consideration paid $ 2,122.1 $ — $ 2,122.1 Adjustments to the initial allocation are based on more detailed information obtained about the specific assets acquired, liabilities assumed, and tax-related matters.

Supplemental financial statemen

Supplemental financial statement information	6 Months Ended
	Jul. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supplemental financial statement information	Supplemental financial statement information Selected condensed consolidated balance sheet and condensed consolidated statement of operations and comprehensive income components consist of the following: Property and equipment Property and equipment consisted of the following as of July 31, 2020 and January 31, 2020: (in thousands) July 31, 2020 January 31, 2020 Leasehold improvements $ 22,112 $ 19,240 Furniture and fixtures 9,194 7,929 Computer equipment 26,621 22,074 Property and equipment, gross 57,927 49,243 Accumulated depreciation (23,399) (15,757) Property and equipment, net $ 34,528 $ 33,486 Depreciation expense for the three months ended July 31, 2020 and 2019 was $4.1 million and $1.0 million, respectively, and $8.0 million and $1.8 million for the six months ended July 31, 2020 and 2019, respectively. Contract balances The Company does not recognize revenue in advance of invoicing its customers and therefore has no related contract assets. The Company records a receivable when revenue is recognized prior to payment and the Company has unconditional right to payment. Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied. As of July 31, 2020 and January 31, 2020, the balance of deferred revenue was $11.5 million and $3.7 million, respectively. The balances are related to cash received in advance for an interchange revenue arrangement, other up-front fees and other commuter deferred revenue, and are generally recognized within twelve months, with the exception of the interchange arrangement, which is recognized over a term of approximately ten years. During the three and six months ended July 31, 2020, approximately $0.6 million and $1.4 million of revenue, respectively, was recognized that was included in the balance of deferred revenue as of January 31, 2020. Leases The components of operating lease costs were as follows: Three months ended July 31, Six months ended July 31, (in thousands) 2020 2019 2020 2019 Operating lease expense $ 3,925 1,086 8,249 2,160 Sublease income (450) — (900) — Net operating lease expense $ 3,475 $ 1,086 $ 7,349 $ 2,160 Supplemental cash flow information related to the Company's operating leases was as follows: Six months ended July 31, (in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,468 $ 1,829 Operating lease right-of-use assets obtained in exchange for new operating lease obligations $ 17,480 $ 199 Other income (expense), net Other income (expense), net, consisted of the following: Three months ended July 31, Six months ended July 31, (in thousands) 2020 2019 2020 2019 Interest income $ 76 $ 1,884 $ 676 $ 3,227 Gain on equity securities — 3,774 — 27,285 Acquisition gains (costs) 28 (6,596) (66) (7,780) Other expense (928) (123) (2,198) (130) Total other income (expense), net $ (824) $ (1,061) $ (1,588) $ 22,602

Intangible assets and goodwill

Intangible assets and goodwill	6 Months Ended
	Jul. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets and goodwill	Intangible assets and goodwill Intangible assets The gross carrying amount and associated accumulated amortization of intangible assets were as follows as of July 31, 2020 and January 31, 2020: (in thousands) July 31, 2020 January 31, 2020 Amortizable intangible assets: Software and software development costs $ 100,908 $ 76,221 Acquired HSA portfolios 117,750 92,770 Acquired customer relationships 601,381 601,381 Acquired developed technology 96,925 96,925 Acquired trade names 12,300 12,300 Amortizable intangible assets, gross 929,264 879,597 Accumulated amortization (146,946) (98,851) Total amortizable intangible assets, net 782,318 780,746 Acquired in process software development costs 788 2,533 Total intangible assets, net $ 783,106 $ 783,279 During the three months ended July 31, 2020 and 2019, the Company expensed a total of $10.3 million and $3.8 million, respectively, and $20.6 million and $7.7 million for the six months ended July 31, 2020 and 2019, respectively, in software development costs primarily related to the post-implementation and operation stages of its proprietary software. Amortization expense for the three months ended July 31, 2020 and 2019 was $24.5 million and $4.0 million, respectively, and $48.1 million and $7.9 million for the six months ended July 31, 2020 and 2019, respectively. Goodwill During the three months ended July 31, 2020, goodwill increased by $1.2 million due to measurement period adjustments. There were no additional changes to the goodwill carrying value during the three and six months ended July 31, 2020 and 2019.

Commitments and contingencies

Commitments and contingencies	6 Months Ended
	Jul. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies	Commitments and contingencies Commitments The Company’s principal commitments consist of a term loan facility, operating lease obligations for office space, data storage facilities, and other leases, a processing services agreement with a vendor, and contractual commitments related to network infrastructure, equipment, and certain maintenance agreements under long-term, non-cancelable commitments. Except for the $200 million principal prepayment on our term loan facility, there were no material changes during the three and six months ended July 31, 2020, outside of the ordinary course of business, in our commitments from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2020. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Legal matters WageWorks is pursuing affirmative claims against the Office of Personnel Management ("OPM") to obtain payment for services provided by WageWorks between March 1, 2016 and August 31, 2016 pursuant to its contract with OPM. In connection with WageWorks' claims against OPM, OPM has also claimed that an erroneous statement in a certificate signed by a former executive officer constituted a violation of the False Claims Act and moved to dismiss part of WageWorks' claim against OPM as a result. As with all legal proceedings, no assurance can be provided as to the outcome of these matters or if WageWorks or OPM will be successful. On March 9, 2018, a putative class action was filed in the U.S. District Court for the Northern District of California (the “Securities Class Action”). On May 16, 2019, a consolidated amended complaint was filed by the lead plaintiffs asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, against WageWorks, its former Chief Executive Officer and its former Chief Financial Officer on behalf of purchasers of WageWorks common stock between May 6, 2016 and March 1, 2018. The complaint also alleges claims under the Securities Act of 1933, as amended, arising from WageWorks’ June 19, 2017 common stock offering against those same defendants, as well as the members of its board of directors at the time of that offering. On June 22, 2018 and September 6, 2018, two derivative lawsuits were filed against certain of WageWorks’ former officers and directors and WageWorks (as nominal defendant) in the Superior Court of the State of California, County of San Mateo. The actions were consolidated. On July 23, 2018, a similar derivative lawsuit was filed against certain former WageWorks’ officers and directors and WageWorks (as nominal defendant) in the U.S. District Court for the Northern District of California (together, the “Derivative Suits”). The allegations in the Derivative Suits relate to substantially the same facts as those underlying the Securities Class Action described above. The plaintiffs seek unspecified damages and fees and costs. Plaintiffs in the Superior Court action filed an amended consolidated complaint on October 28, 2019, naming as defendants certain former officers and directors of WageWorks and alleging a direct claim of "inseparable fraud/breach of fiduciary duty" on behalf of a class. WageWorks was not named as a party in that complaint. On June 24, 2020, the court granted the defendants’ motion to dismiss the amended complaint. The plaintiffs subsequently filed a notice of appeal. WageWorks voluntarily contacted the San Francisco office of the SEC Division of Enforcement regarding the restatement of WageWorks' financial statements and related independent investigation. WageWorks is providing information and documents to the SEC and continues to cooperate with the SEC’s investigation into these matters. The U.S. Attorney’s Office for the Northern District of California also opened an investigation. WageWorks has provided documents and information to the U.S. Attorney’s Office and continues to cooperate with any inquiries by the U.S. Attorney’s Office regarding the matter. WageWorks previously entered into indemnification agreements with its former directors and officers and, pursuant to these indemnification agreements, is covering the defense of its former directors and officers in the legal proceedings described above. The Company and its subsidiaries are involved in various other litigation, governmental proceedings and claims, not described above, that arise in the normal course of business. While it is not possible to determine the ultimate outcome or the duration of such litigation, governmental proceedings or claims, the Company believes, based on current knowledge, that such litigation, proceedings and claims will not have a material impact on the Company’s financial position, results of operations and cash flows for the period. The Company maintains liability insurance coverage that is intended to cover the legal matters described above; however, it is possible that claims may be denied by our insurance carriers or could exceed the amount of our applicable insurance coverage, we may be required by our insurance carriers to contribute to the payment of claims, and our insurance coverage may not continue to be available to us on acceptable terms or in sufficient amounts. As required under GAAP, the Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on currently available information, the Company does not believe that any liabilities relating to these matters are probable or that the amount of any resulting loss is estimable. However, litigation is subject to inherent uncertainties and the Company’s view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations and cash flows for the period in which the unfavorable outcome occurs, and potentially in future periods.

Income taxes

Income taxes	6 Months Ended
	Jul. 31, 2020
Income Tax Disclosure [Abstract]
Income taxes	Income taxes The Company follows FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting , for the computation and presentation of its interim period tax provision. Accordingly, management estimated the effective annual tax rate and applied this rate to the year-to-date pre-tax book income to determine the interim benefit or provision for income taxes. For the three and six months ended July 31, 2020, the Company recorded an income tax benefit of $0.5 million and $0.3 million, respectively. This resulted in an effective income tax benefit rate of 78.6% and 24.0% for the three and six months ended July 31, 2020, respectively, compared with an effective income tax expense rate of 18.4% for each of the three and six months ended July 31, 2019. For the three and six months ended July 31, 2020 and 2019, the net impact of discrete tax items caused a 62.9 and 57.4 percentage point benefit and a 4.8 and 4.6 percentage point benefit, respectively, to the effective income tax rate primarily due to the excess tax benefit on stock-based compensation expense recognized in the provision for income taxes relative to pre-tax book income. Due to significantly lower pre-tax book income during the six months ended July 31, 2020, such excess tax benefit had a greater impact on the effective income tax rate. As of July 31, 2020 and January 31, 2020, the Company’s total gross unrecognized tax benefit was $9.8 million and $9.4 million, respectively. As of July 31, 2020 and January 31, 2020, a net unrecognized tax benefit of $0.6 million and $0.5 million, respectively, was recorded in the condensed consolidated balance sheets. If recognized, $9.0 million of the total gross unrecognized tax benefits would affect the Company's effective tax rate as of July 31, 2020. The Company files income tax returns with U.S. federal and state taxing jurisdictions and is not currently under examination with any jurisdiction. As a result of the Company's net operating loss carryforwards and tax credit carryforwards, the Company remains subject to examination by one or more jurisdictions for tax years after 2000.

Indebtedness

Indebtedness	6 Months Ended
	Jul. 31, 2020
Debt Disclosure [Abstract]
Indebtedness	Indebtedness As of July 31, 2020, long-term debt consisted of the following: (in millions) July 31, 2020 Term loan facility $ 1,026.6 Less: unamortized loan issuance costs (1) 19.0 Long-term debt, net of issuance costs $ 1,007.6 (1) In addition to the $19.0 million of unamortized issuance costs related to the term loan facility, $5.7 million of unamortized issuance costs related to our revolving credit facility are included within other assets on the July 31, 2020 condensed consolidated balance sheet. In connection with the closing of the Acquisition, on August 30, 2019, the Company entered into a credit facility (the "Credit Agreement”) that provided for: (i) a five (ii) a five Borrowings under the Credit Facilities bear interest at an annual rate equal to, at the option of HealthEquity, either (i) LIBOR (adjusted for reserves) plus a margin ranging from 1.25% to 2.25% or (ii) an alternate base rate plus a margin ranging from 0.25% to 1.25%, with the applicable margin determined by reference to a leverage-based pricing grid set forth in the Credit Agreement. As of July 31, 2020, the stated interest rate was 2.16% and the effective interest rate was 2.70%. The Company is also required to pay certain fees to the lenders, including, among others, a quarterly commitment fee on the average unused amount of the Revolving Credit Facility at a rate ranging from 0.20% to 0.40%, with the applicable rate also determined by reference to a leverage-based pricing grid set forth in the Credit Agreement. The loans made under the Term Loan Facility are required to be repaid as described in the following table: Fiscal year ending January 31, (in millions) Principal payments Remaining 2021 $ 23.4 2022 62.5 2023 70.3 2024 101.6 2025 (1) 768.8 Total principal payments $ 1,026.6 (1) The amount required to be repaid in 2025 reflects the $200.0 million prepayment made in July 2020 with proceeds from the follow-on offering. The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit, among other things, the ability of the Company to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, in each case, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the Credit Agreement contains financial performance covenants, which require the Company to maintain (i) a maximum total net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 5.00 to 1.00, which steps down to 4.50 to 1.00 beginning with the fiscal quarter ending July 31, 2021 (subject to a customary “acquisition holiday” provision that allows the maximum total net leverage ratio to increase to 5.00 to 1.00 for the four fiscal quarter period ending on or following the date of a permitted acquisition by the Company in excess of $100.0 million), and (ii) a minimum interest coverage ratio, measured as of the last day of each fiscal quarter, of no less than 3.00 to 1.00. The Company was in compliance with all covenants under the Credit Agreement as of July 31, 2020, and for the period then ended. The obligations of HealthEquity under the Credit Agreement are required to be unconditionally guaranteed by WageWorks and each of the Company's subsequently acquired or organized direct and indirect domestic subsidiaries and are secured by security interests in substantially all assets of HealthEquity and the guarantors, in each case, subject to certain customary exceptions.

Stock-based compensation

Stock-based compensation	6 Months Ended
	Jul. 31, 2020
Share-based Payment Arrangement [Abstract]
Stock-based compensation	Stock-based compensation The following table shows a summary of stock-based compensation in the Company's condensed consolidated statements of operations and comprehensive income (loss) during the periods presented: Three months ended July 31, Six months ended July 31, (in thousands) 2020 2019 2020 2019 Cost of revenue $ 2,065 $ 1,010 $ 3,528 $ 1,869 Sales and marketing 1,818 1,158 2,776 2,166 Technology and development 2,493 1,930 5,410 3,429 General and administrative 5,062 3,492 7,120 6,154 Total stock-based compensation expense $ 11,438 $ 7,590 $ 18,834 $ 13,618 Stock award plans Incentive Plan. The Company grants stock options, restricted stock units ("RSUs"), and restricted stock awards ("RSAs") under the HealthEquity, Inc. 2014 Equity Incentive Plan (as amended and restated, the "Incentive Plan"), which provided for the issuance of stock awards to the directors and team members of the Company to purchase up to an aggregate of 2.6 million shares of common stock. In addition, under the Incentive Plan, the number of shares of common stock reserved for issuance under the Incentive Plan automatically increases on February 1 of each year, beginning as of February 1, 2015 and continuing through and including February 1, 2024, by 3% of the total number of shares of the Company’s capital stock outstanding on January 31 of the preceding fiscal year, or a lesser number of shares determined by the board of directors. As of July 31, 2020, 6.4 million shares were available for grant under the Incentive Plan. WageWorks Incentive Plan. At the closing of the Acquisition, and in accordance with the merger agreement related to the Acquisition, certain RSUs with respect to WageWorks common stock, granted under WageWorks, Inc. 2010 Equity Incentive Plan (the "WageWorks Incentive Plan"), were replaced by the Company and converted into RSUs with respect to 0.5 million shares of common stock of the Company. No additional shares were issued under the WageWorks Incentive Plan, and the period during which the remaining 5.3 million shares were available to be utilized expired on May 26, 2020. Stock options A summary of stock option activity is as follows: Outstanding stock options (in thousands, except for exercise prices and term) Number of Range of Weighted- Weighted- Aggregate Outstanding as of January 31, 2020 2,040 $0.10 - 82.39 $ 30.35 5.90 $ 74,009 Granted 16 $66.06 $ 66.06 Exercised (116) $0.10 - 44.53 $ 23.65 Forfeited (7) $25.45 - 44.53 $ 34.31 Outstanding as of July 31, 2020 1,933 $0.10 - 82.39 $ 31.04 5.40 $ 43,958 Vested and expected to vest as of July 31, 2020 1,933 $ 31.04 5.40 $ 43,958 Exercisable as of July 31, 2020 1,596 $ 26.12 5.00 $ 41,916 Restricted stock units and restricted stock awards A summary of RSU and RSA activity is as follows: RSUs and PRSUs RSAs and PRSAs (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value Shares Weighted-average grant date fair value Outstanding as of January 31, 2020 1,380 $ 63.33 235 $ 61.91 Granted 1,166 57.00 14 74.81 Vested (416) 53.84 (10) 62.80 Forfeited (222) 68.35 (32) 62.41 Outstanding as of July 31, 2020 1,908 $ 60.95 207 $ 62.66 Performance restricted stock units and awards. In March 2018, the Company awarded 227,760 performance-based RSAs ("PRSAs"). The Company records stock-based compensation related to PRSAs when it is considered probable that the performance conditions will be met. The underlying shares were issued at 200% of the target level of achievement at the grant date. In March 2020, the Compensation Committee modified the awards by deeming the performance condition related to two-thirds of the awards to be achieved at 100% and creating a new performance condition related to the remaining one-third of the awards to reflect the state of the Company after the Acquisition of WageWorks. The new performance condition is based on the achievement of certain financial criteria measured on January 31, 2021. The modification affected 10 team members and did not result in an adjustment to stock-based compensation expense. The PRSAs cliff vest upon approval by the Compensation Committee. The modified performance condition for the one-third tranche allows for a range of vesting from 0% to 200% based on the level of achievement of the performance condition, and the Company believes it is probable that the PRSAs will vest at least in part. As the underlying shares were issued at grant date, they are subject to clawback based on actual Company performance. In March 2019, the Company awarded 129,963 PRSUs. The Company records stock-based compensation related to PRSUs when it is considered probable that the performance conditions will be met. In March 2020, the Compensation Committee modified the awards by deeming the performance condition related to one-third of the awards to be achieved at 100% and creating new performance conditions related to the remaining two-thirds of the awards to reflect the state of the Company after the Acquisition of WageWorks. The new performance conditions are based on the achievement of certain financial criteria measured on January 31, 2021 and 2022. The modification affected 12 team members and resulted in incremental stock-based compensation expense of $6.6 million, which will be recognized over the remaining service period, adjusted for the level of achievement of the performance conditions and any forfeitures. Prior to the modification, the Company did not believe the PRSUs were likely to vest, and as a result, $2.9 million of previously recorded stock-based compensation expense was reversed during the three months ended April 30, 2020. The PRSUs cliff vest upon approval by the Compensation Committee. The modified performance conditions for the two-thirds tranche allow for a range of vesting from 0% to 200% based on the level of achievement of the new performance conditions, and the Company believes it is probable that the PRSUs will vest at least in part. During the six months ended July 31, 2020, the Company awarded 277,950 PRSUs subject to a market condition based on the Company’s total shareholder return ("TSR") relative to the Russell 2000 index as measured on January 31, 2023. The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was approximately $20.8 million. Compensation expense is recorded if the service condition is met regardless of whether the market condition is satisfied. The market condition allows for a range of vesting from 0% to 200% based on the level of performance achieved. The PRSUs cliff vest upon approval by the Compensation Committee.

Fair value

Fair value	6 Months Ended
	Jul. 31, 2020
Fair Value Disclosures [Abstract]
Fair value	Fair value Fair value measurements are made at a specific point in time, based on relevant market information. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1—quoted prices in active markets for identical assets or liabilities; • Level 2—inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3—unobservable inputs based on the Company’s own assumptions. Level 1 instruments are valued based on publicly available daily net asset values. Level 1 instruments consist primarily of cash and cash equivalents. The carrying value of cash and cash equivalents approximate fair values as of July 31, 2020 due to the short-term nature of these instruments. Our long-term debt is considered a Level 2 instrument and is recorded at book value in our condensed consolidated financial statements. Our long-term debt reprices frequently due to variable interest rate terms and entails no significant changes in credit risk. As a result, we believe the fair value of our long-term debt approximates carrying value.

Summary of business and signi_2

Summary of business and significant accounting policies (Policies)	6 Months Ended
	Jul. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of consolidation	Principles of consolidation The condensed consolidated financial statements include the accounts of HealthEquity and its direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Basis of presentation	Basis of presentation The accompanying condensed consolidated financial statements as of July 31, 2020 and for the three and six months ended July 31, 2020 and 2019 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2020. The fiscal year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.
Reclassifications	Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
Recent adopted accounting pronouncements	Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires financial assets measured at amortized cost be presented at the net amount expected to be collected. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the new standard as of February 1, 2020 using the modified retrospective transition method. The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends ASC 820, "Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted the new standard as of February 1, 2020. The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. The Company adopted the new standard as of February 1, 2020. The Company retrospectively adopted the provision related to the classification of taxes partially based on income, and prospectively adopted the provisions related to intraperiod tax allocation and interim recognition of enactment of tax laws. The adoption of this standard did not have a material effect on the Company’s current- or prior-period condensed consolidated financial statements.
Fair value measurement	Fair value measurements are made at a specific point in time, based on relevant market information. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1—quoted prices in active markets for identical assets or liabilities; • Level 2—inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3—unobservable inputs based on the Company’s own assumptions. Level 1 instruments are valued based on publicly available daily net asset values. Level 1 instruments consist primarily of cash and cash equivalents. The carrying value of cash and cash equivalents approximate fair values as of July 31, 2020 due to the short-term nature of these instruments. Our long-term debt is considered a Level 2 instrument and is recorded at book value in our condensed consolidated financial statements. Our long-term debt reprices frequently due to variable interest rate terms and entails no significant changes in credit risk. As a result, we believe the fair value of our long-term debt approximates carrying value.

Net income per share (Tables)

Net income per share (Tables)	6 Months Ended
	Jul. 31, 2020
Earnings Per Share [Abstract]
Schedule of earnings (loss) per share, basic and diluted	The following table sets forth the computation of basic and diluted net income per share: Three months ended July 31, Six months ended July 31, (in thousands, except per share data) 2020 2019 2020 2019 Numerator (basic and diluted): Net income (loss) $ (148) $ 19,366 $ 1,678 $ 61,188 Denominator (basic): Weighted-average common shares outstanding 72,343 64,220 71,669 63,289 Denominator (diluted): Weighted-average common shares outstanding 72,343 64,220 71,669 63,289 Weighted-average dilutive effect of stock options and restricted stock units — 1,363 1,302 1,496 Diluted weighted-average common shares outstanding 72,343 65,583 72,971 64,785 Net income per share: Basic $ 0.00 $ 0.30 $ 0.02 $ 0.97 Diluted $ 0.00 $ 0.30 $ 0.02 $ 0.94

Business combination (Tables)

Business combination (Tables)	6 Months Ended
	Jul. 31, 2020
Business Combinations [Abstract]
Preliminary Allocation of Consideration	(in millions) Initial Allocation Adjustments Updated Allocation Cash and cash equivalents $ 406.8 $ (14.5) $ 392.3 Other current assets 56.5 1.0 57.5 Property, plant, and equipment 26.6 — 26.6 Operating lease right-of-use assets 42.5 — 42.5 Intangible assets 715.3 — 715.3 Goodwill 1,330.5 (1.3) 1,329.2 Other assets 5.9 — 5.9 Client-held funds obligation (237.5) 17.1 (220.4) Other current liabilities (69.1) (3.4) (72.5) Other long-term liabilities (26.7) — (26.7) Deferred tax liability (128.7) 1.1 (127.6) Total consideration paid $ 2,122.1 $ — $ 2,122.1

Supplemental financial statem_2

Supplemental financial statement information (Tables)	6 Months Ended
	Jul. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Property and equipment	Property and equipment consisted of the following as of July 31, 2020 and January 31, 2020: (in thousands) July 31, 2020 January 31, 2020 Leasehold improvements $ 22,112 $ 19,240 Furniture and fixtures 9,194 7,929 Computer equipment 26,621 22,074 Property and equipment, gross 57,927 49,243 Accumulated depreciation (23,399) (15,757) Property and equipment, net $ 34,528 $ 33,486
Lease cost	The components of operating lease costs were as follows: Three months ended July 31, Six months ended July 31, (in thousands) 2020 2019 2020 2019 Operating lease expense $ 3,925 1,086 8,249 2,160 Sublease income (450) — (900) — Net operating lease expense $ 3,475 $ 1,086 $ 7,349 $ 2,160 Supplemental cash flow information related to the Company's operating leases was as follows: Six months ended July 31, (in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,468 $ 1,829 Operating lease right-of-use assets obtained in exchange for new operating lease obligations $ 17,480 $ 199
Other income (expense), net	Other income (expense), net, consisted of the following: Three months ended July 31, Six months ended July 31, (in thousands) 2020 2019 2020 2019 Interest income $ 76 $ 1,884 $ 676 $ 3,227 Gain on equity securities — 3,774 — 27,285 Acquisition gains (costs) 28 (6,596) (66) (7,780) Other expense (928) (123) (2,198) (130) Total other income (expense), net $ (824) $ (1,061) $ (1,588) $ 22,602

Intangible assets and goodwill

Intangible assets and goodwill (Tables)	6 Months Ended
	Jul. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of finite-lived intangible assets	The gross carrying amount and associated accumulated amortization of intangible assets were as follows as of July 31, 2020 and January 31, 2020: (in thousands) July 31, 2020 January 31, 2020 Amortizable intangible assets: Software and software development costs $ 100,908 $ 76,221 Acquired HSA portfolios 117,750 92,770 Acquired customer relationships 601,381 601,381 Acquired developed technology 96,925 96,925 Acquired trade names 12,300 12,300 Amortizable intangible assets, gross 929,264 879,597 Accumulated amortization (146,946) (98,851) Total amortizable intangible assets, net 782,318 780,746 Acquired in process software development costs 788 2,533 Total intangible assets, net $ 783,106 $ 783,279
Schedule of indefinite-lived intangible assets	The gross carrying amount and associated accumulated amortization of intangible assets were as follows as of July 31, 2020 and January 31, 2020: (in thousands) July 31, 2020 January 31, 2020 Amortizable intangible assets: Software and software development costs $ 100,908 $ 76,221 Acquired HSA portfolios 117,750 92,770 Acquired customer relationships 601,381 601,381 Acquired developed technology 96,925 96,925 Acquired trade names 12,300 12,300 Amortizable intangible assets, gross 929,264 879,597 Accumulated amortization (146,946) (98,851) Total amortizable intangible assets, net 782,318 780,746 Acquired in process software development costs 788 2,533 Total intangible assets, net $ 783,106 $ 783,279

Indebtedness (Tables)

Indebtedness (Tables)	6 Months Ended
	Jul. 31, 2020
Debt Disclosure [Abstract]
Schedule of Long-term Debt	As of July 31, 2020, long-term debt consisted of the following: (in millions) July 31, 2020 Term loan facility $ 1,026.6 Less: unamortized loan issuance costs (1) 19.0 Long-term debt, net of issuance costs $ 1,007.6
Schedule of Maturities of Long-term Debt	The loans made under the Term Loan Facility are required to be repaid as described in the following table: Fiscal year ending January 31, (in millions) Principal payments Remaining 2021 $ 23.4 2022 62.5 2023 70.3 2024 101.6 2025 (1) 768.8 Total principal payments $ 1,026.6 (1) The amount required to be repaid in 2025 reflects the $200.0 million prepayment made in July 2020 with proceeds from the follow-on offering.

Stock-based compensation (Table

Stock-based compensation (Tables)	6 Months Ended
	Jul. 31, 2020
Share-based Payment Arrangement [Abstract]
Summary of share based compensation recognized	The following table shows a summary of stock-based compensation in the Company's condensed consolidated statements of operations and comprehensive income (loss) during the periods presented: Three months ended July 31, Six months ended July 31, (in thousands) 2020 2019 2020 2019 Cost of revenue $ 2,065 $ 1,010 $ 3,528 $ 1,869 Sales and marketing 1,818 1,158 2,776 2,166 Technology and development 2,493 1,930 5,410 3,429 General and administrative 5,062 3,492 7,120 6,154 Total stock-based compensation expense $ 11,438 $ 7,590 $ 18,834 $ 13,618
Summary of stock option activity	A summary of stock option activity is as follows: Outstanding stock options (in thousands, except for exercise prices and term) Number of Range of Weighted- Weighted- Aggregate Outstanding as of January 31, 2020 2,040 $0.10 - 82.39 $ 30.35 5.90 $ 74,009 Granted 16 $66.06 $ 66.06 Exercised (116) $0.10 - 44.53 $ 23.65 Forfeited (7) $25.45 - 44.53 $ 34.31 Outstanding as of July 31, 2020 1,933 $0.10 - 82.39 $ 31.04 5.40 $ 43,958 Vested and expected to vest as of July 31, 2020 1,933 $ 31.04 5.40 $ 43,958 Exercisable as of July 31, 2020 1,596 $ 26.12 5.00 $ 41,916
Summary of restricted stock unit activity	A summary of RSU and RSA activity is as follows: RSUs and PRSUs RSAs and PRSAs (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value Shares Weighted-average grant date fair value Outstanding as of January 31, 2020 1,380 $ 63.33 235 $ 61.91 Granted 1,166 57.00 14 74.81 Vested (416) 53.84 (10) 62.80 Forfeited (222) 68.35 (32) 62.41 Outstanding as of July 31, 2020 1,908 $ 60.95 207 $ 62.66

Summary of business and signi_3

Summary of business and significant accounting policies (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Jul. 31, 2020	Jul. 31, 2020	Jul. 31, 2020	Jul. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Principal payments on long-term debt			$ 215,625	$ 0
Term Loan Facility | Line of Credit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Principal payments on long-term debt		$ 200,000	$ 200,000
Follow on equity offering
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Common stock, shares (in shares)	5,290,000
Offering price per share (in usd per share)	$ 56	$ 56	$ 56
Net proceeds from follow on offering	$ 286,800
Underwriting discounts and commissions	8,900
Other offering expenses payable	600	$ 600	$ 600
Principal payments on long-term debt	200,000
Follow on equity offering | Term Loan Facility | Line of Credit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Principal payments on long-term debt	$ 200,000

Net income per share (Details)

Net income per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Numerator (basic and diluted):
Net income (loss)	$ (148)	$ 19,366	$ 1,678	$ 61,188
Denominator (basic):
Weighted-average common shares outstanding (in shares)	72,343	64,220	71,669	63,289
Denominator (diluted):
Weighted-average common shares outstanding (in shares)	72,343	64,220	71,669	63,289
Weighted-average dilutive effect of stock options and restricted stock units (in shares)	0	1,363	1,302	1,496
Diluted weighted-average common shares outstanding (in shares)	72,343	65,583	72,971	64,785
Net income per share:
Basic (in usd per share)	$ 0	$ 0.30	$ 0.02	$ 0.97
Diluted (in usd per share)	$ 0	$ 0.30	$ 0.02	$ 0.94
Antidilutive securities excluded from computation of earnings per share (in shares)	2,100	300	600	300

Business combination (Narrative

Business combination (Narrative) (Details) - Wage Works Inc. $ / shares in Units, $ in Millions	Aug. 30, 2019USD ($)$ / shares
Business Acquisition [Line Items]
Merger related costs, price per share | $ / shares	$ 51.35
Aggregate fair value of WageWorks stock acquired	$ 2,000
Cash paid	816.9
Borrowing pursuant to term loan facility	1,220
Line of Credit | Term Loan Facility
Business Acquisition [Line Items]
Cash paid	$ 30.5

Business combination (Prelimina

Business combination (Preliminary Allocation of Consideration) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		11 Months Ended
	Jul. 31, 2020	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jan. 31, 2020	Aug. 30, 2019
Business Acquisition [Line Items]
Goodwill	$ 1,333,808	$ 1,333,808		$ 1,333,808	$ 1,332,631
Goodwill, adjustments	1,200	1,177	$ 0
Wage Works Inc.
Business Acquisition [Line Items]
Cash and cash equivalents	392,300	392,300		392,300		$ 406,800
Cash and cash equivalents, adjustments				(14,500)
Other current assets	57,500	57,500		57,500		56,500
Other current assets, adjustments				1,000
Property, plant, and equipment	26,600	26,600		26,600		26,600
Operating lease right-of-use assets	42,500	42,500		42,500		42,500
Intangible assets	715,300	715,300		715,300		715,300
Goodwill	1,329,200	1,329,200		1,329,200		1,330,500
Goodwill, adjustments				(1,300)
Other assets	5,900	5,900		5,900		5,900
Client-held funds obligation	(220,400)	(220,400)		(220,400)		(237,500)
Client-held funds obligation, adjustments				17,100
Other current liabilities	(72,500)	(72,500)		(72,500)		(69,100)
Other current liabilities, adjustments				(3,400)
Other long-term liabilities	(26,700)	(26,700)		(26,700)		(26,700)
Deferred tax liability	(127,600)	(127,600)		(127,600)		(128,700)
Deferred tax liability, adjustments				1,100
Total consideration paid	$ 2,122,100	$ 2,122,100		2,122,100		$ 2,122,100
Total consideration paid, adjustments				$ 0

Supplemental financial statem_3

Supplemental financial statement information (Property and equipment) (Details) - USD ($) $ in Thousands	Jul. 31, 2020	Jan. 31, 2020
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 57,927	$ 49,243
Accumulated depreciation	(23,399)	(15,757)
Property and equipment, net	34,528	33,486
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	22,112	19,240
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,194	7,929
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 26,621	$ 22,074

Supplemental financial statem_4

Supplemental financial statement information (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019	Jan. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Depreciation expense	$ 4.1	$ 1	$ 8	$ 1.8
Remaining performance obligation	11.5		$ 11.5		$ 3.7
Deferred revenue interchange arrangement recognition term			10 years
Revenue recognition	$ 0.6		$ 1.4

Supplemental financial statem_5

Supplemental financial statement information (Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating lease expense	$ 3,925	$ 1,086	$ 8,249	$ 2,160
Sublease income	(450)	0	(900)	0
Lease, cost, total	$ 3,475	$ 1,086	$ 7,349	$ 2,160

Supplemental financial statem_6

Supplemental financial statement information (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019
Cash Flow, Operating Activities, Lessee [Abstract]
Operating cash flows from operating leases	$ 6,468	$ 1,829
Operating lease right-of-use assets obtained in exchange for new operating lease obligations	$ 17,480	$ 199

Supplemental financial statem_7

Supplemental financial statement information (Other income (expense), net) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest income	$ 76	$ 1,884	$ 676	$ 3,227
Gain on equity securities	0	3,774	0	27,285
Acquisition gains (costs)	28	(6,596)	(66)	(7,780)
Other expense	(928)	(123)	(2,198)	(130)
Total other income (expense), net	$ (824)	$ (1,061)	$ (1,588)	$ 22,602

Intangible assets and goodwil_2

Intangible assets and goodwill (Schedule of intangible assets) (Details) - USD ($) $ in Thousands	Jul. 31, 2020	Jan. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	$ 929,264	$ 879,597
Accumulated amortization	(146,946)	(98,851)
Total amortizable intangible assets, net	782,318	780,746
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total intangible assets, net	783,106	783,279
In Process Research and Development
Indefinite-lived Intangible Assets [Line Items]
Acquired in process software development costs	788	2,533
Software and software development costs
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	100,908	76,221
Acquired HSA portfolios
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	117,750	92,770
Acquired customer relationships
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	601,381	601,381
Acquired developed technology
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	96,925	96,925
Acquired trade names
Finite-Lived Intangible Assets [Line Items]
Amortizable intangible assets, gross	$ 12,300	$ 12,300

Intangible assets and goodwil_3

Intangible assets and goodwill (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Software development costs incurred and expensed	$ 10,300,000	$ 3,800,000	$ 20,600,000	$ 7,700,000
Amortization expense	24,500,000	4,000,000	48,100,000	7,900,000
Goodwill, adjustments	1,200,000		1,177,000	0
Change in goodwill		$ 0	$ 0	$ 0
Change in goodwill, excluding adjustments	$ 0

Commitments and contingencies (

Commitments and contingencies (Details) $ in Thousands	Sep. 06, 2018lawsuit	Jun. 22, 2018lawsuit	Jul. 31, 2020USD ($)	Jul. 31, 2020USD ($)	Jul. 31, 2019USD ($)
Loss Contingencies [Line Items]
Principal payments on long-term debt				$ 215,625	$ 0
Number of derivative lawsuits | lawsuit	2	2
Term Loan Facility | Line of Credit
Loss Contingencies [Line Items]
Principal payments on long-term debt			$ 200,000	$ 200,000

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019	Jan. 31, 2020
Income Tax Disclosure [Abstract]
Income tax benefit	$ 543	$ (4,370)	$ 325	$ (13,826)
Effective tax rate	(78.60%)	18.40%	(24.00%)	18.40%
Effective tax rate, primarily due to excess tax benefit on stock-based compensation expense (benefit)	62.90%	4.80%	57.40%	4.60%
Gross unrecognized tax benefits	$ 9,800		$ 9,800		$ 9,400
Unrecognized tax benefit	600		600		$ 500
Unrecognized tax benefits that would impact the effective tax rate	$ 9,000		$ 9,000

Indebtedness Schedule of Long-t

Indebtedness Schedule of Long-term Debt (Details) - USD ($) $ in Millions	Jul. 31, 2020	Jan. 31, 2020
Debt Disclosure [Abstract]
Term loan facility	$ 1,026.6	$ 1,026.6
Less: unamortized loan issuance costs	19
Total	$ 1,007.6

Indebtedness (Narrative) (Detai

Indebtedness (Narrative) (Details) - USD ($)	Aug. 30, 2019	Jul. 31, 2020
Debt Instrument [Line Items]
Unamortized loan issuance costs		$ 19,000,000
Stated interest rate percentage		2.16%
Effective interest rate percentage		2.70%
Acquisition threshold for maximum total net leverage ratio		$ 100,000,000
Minimum interest coverage ratio		300.00%
Debt covenant, beginning July 31, 2020
Debt Instrument [Line Items]
Maximum leverage ratio		500.00%
Debt covenant, beginning July 31, 2021
Debt Instrument [Line Items]
Maximum leverage ratio		450.00%
Debt covenant, acquisition holiday provision
Debt Instrument [Line Items]
Maximum leverage ratio		500.00%
London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Variable rate borrowing spread		1.25%
London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Variable rate borrowing spread		2.25%
Customary Base Rate | Minimum
Debt Instrument [Line Items]
Variable rate borrowing spread		0.25%
Customary Base Rate | Maximum
Debt Instrument [Line Items]
Variable rate borrowing spread		1.25%
Secured Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Commitment fee percentage		0.20%
Secured Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Commitment fee percentage		0.40%
Credit Agreement | Secured Debt | Term Loan Facility
Debt Instrument [Line Items]
Credit facility, amount	$ 1,250,000,000
Credit Agreement | Secured Debt | Line of Credit
Debt Instrument [Line Items]
Facility term	5 years
Credit Agreement | Line of Credit | Secured Revolving Credit Facility
Debt Instrument [Line Items]
Facility term	5 years
Credit facility, amount	$ 350,000,000
Long-term line of credit		$ 0
Other assets
Debt Instrument [Line Items]
Unamortized loan issuance costs		$ 5,700,000

Indebtedness Schedule of Maturi

Indebtedness Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Jul. 31, 2020	Jul. 31, 2020	Jul. 31, 2019	Jan. 31, 2020
Debt Instrument [Line Items]
Remaining 2021				$ 23,400
2022				62,500
2023				70,300
2024				101,600
2025 (1)				768,800
Total principal payments	$ 1,026,600	$ 1,026,600		$ 1,026,600
Principal payments on long-term debt		$ 215,625	$ 0
Follow on equity offering
Debt Instrument [Line Items]
Principal payments on long-term debt	$ 200,000

Stock-based compensation (Summa

Stock-based compensation (Summary of share based compensation recognized) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 11,438	$ 7,590	$ 18,834	$ 13,618
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2,065	1,010	3,528	1,869
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	1,818	1,158	2,776	2,166
Technology and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2,493	1,930	5,410	3,429
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 5,062	$ 3,492	$ 7,120	$ 6,154

Stock-based compensation (Narra

Stock-based compensation (Narrative) (Details) $ in Millions	1 Months Ended			6 Months Ended
	Mar. 31, 2020USD ($)numberOfMember	Mar. 31, 2019shares	Mar. 31, 2018shares	Jul. 31, 2020USD ($)shares
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance units awards (in shares)				1,166,000
Performance restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance units awards (in shares)		129,963		277,950
Award vesting rights percentage	100.00%
Fraction of awards fully achieved	33.33%
Fraction of awards modified	66.67%
Number of team members modification affected | numberOfMember	12
Incremental compensation cost | $	$ 6.6
Share-based payment arrangement, decrease in expense due to modification of terms | $	$ 2.9
Grant date fair value | $				$ 20.8
Performance restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance units awards (in shares)			227,760
Award vesting rights percentage	100.00%
Fraction of awards fully achieved	66.67%
Fraction of awards modified	33.33%
Number of team members modification affected | numberOfMember	10
Performance restricted stock awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		0.00%	0.00%	0.00%
Performance restricted stock awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage		200.00%	200.00%	200.00%
Restricted stock units | Wage Works Inc.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of service-based common stock (in shares)				500,000
Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)				2,600,000
Percentage of capital stock				3.00%
Shares available for grant under incentive plan (in shares)				6,400,000
WageWorks Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock issuable (in shares)				5,300,000

Stock-based compensation (Stock

Stock-based compensation (Stock option activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 31, 2020	Jan. 31, 2020
Number of options (shares)
Opening balance (shares)	2,040
Granted (shares)	16
Exercised (shares)	(116)
Forfeited (shares)	(7)
Ending balance (shares)	1,933	2,040
Vested and expected to vest as of year end (in shares)	1,933
Exercisable as of year end (in shares)	1,596
Range of exercise prices (usd per share)
Beginning balance, minimum (usd per share)	$ 0.10
Beginning balance, maximum (usd per share)	82.39
Granted (usd per share)	66.06
Exercised, minimum (usd per share)	0.10
Exercised, maximum (usd per share)	44.53
Forfeited, minimum (usd per share)	25.45
Forfeited, maximum (usd per share)	44.53
Ending balance, minimum (usd per share)	0.10	$ 0.10
Ending balance, maximum (usd per share)	82.39	82.39
Weighted- average exercise price (usd per share)
Opening balance (usd per share)	30.35
Granted (usd per share)	66.06
Exercised (usd per share)	23.65
Forfeited (usd per share)	34.31
Ending balance (usd per share)	31.04	$ 30.35
Vested and expected to vest as of year end, weighted average exercise price (usd per share)	31.04
Exercisable as of year end, weighted-average exercise price (usd per share)	$ 26.12
Outstanding stock options, weighted average contractual term (in years)	5 years 4 months 24 days	5 years 10 months 24 days
Vested and expected to vest as of year end, weighted average contractual term (in years)	5 years 4 months 24 days
Exercisable as of year end, weighted-average contractual term (in years)	5 years
Beginning balance, outstanding stock options, aggregate intrinsic value	$ 74,009
Ending balance, outstanding stock options, aggregate intrinsic value	43,958	$ 74,009
Vested and expected to vest as of year end, aggregate intrinsic value (usd per share)	43,958
Exercisable as of year end, aggregate intrinsic value	$ 41,916

Stock-based compensation (Restr

Stock-based compensation (Restricted stock unity activity) (Details) shares in Thousands	6 Months Ended
	Jul. 31, 2020$ / sharesshares
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested, beginning balance (in shares) | shares	1,380
Granted (in shares) | shares	1,166
Vested (in shares) | shares	(416)
Forfeited (in shares) | shares	(222)
Unvested, ending balance (in shares) | shares	1,908
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested, beginning balance (usd per share) | $ / shares	$ 63.33
Granted (usd per share) | $ / shares	57
Vested (usd per share) | $ / shares	53.84
Forfeited (usd per share) | $ / shares	68.35
Unvested, ending balance (usd per share) | $ / shares	$ 60.95
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested, beginning balance (in shares) | shares	235
Granted (in shares) | shares	14
Vested (in shares) | shares	(10)
Forfeited (in shares) | shares	(32)
Unvested, ending balance (in shares) | shares	207
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested, beginning balance (usd per share) | $ / shares	$ 61.91
Granted (usd per share) | $ / shares	74.81
Vested (usd per share) | $ / shares	62.80
Forfeited (usd per share) | $ / shares	62.41
Unvested, ending balance (usd per share) | $ / shares	$ 62.66